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(Alliance News) - London stocks were higher at midday on Tuesday with the hope of a softened trade stance from the US towards European auto tariffs and investors looking out for any further updates on the US-China situation from President Donald Trump in a speech later today.
The FTSE 100 was 26.05 points higher, or 0.4%, at 7,354.59 Tuesday midday. The FTSE 250 was down 13.21 points, or 0.1%, at 20,396.82, and the AIM All-Share was flat at 891.12.
The Cboe UK 100 index was up 0.4% at 12,465.98. The Cboe UK 250 was down 0.1% at 18,318.02, and the Cboe UK Small Companies was flat at 11,293.93
In European equities, the CAC 40 index in Paris was up 0.3% and the auto maker-heavy DAX 30 in Frankfurt up 0.7% in early afternoon trade.
"Speculation that President Trump will defer making a decision whether to slap tariffs on EU vehicle imports this week has boosted sentiment in European equity markets. The Trump administration has softened its stance in relation to the EU in recent months, which has been a factor in the rally in European stocks," said David Madden at CMC Markets.
"The White House has until tomorrow to make its call, and there is talk the decision will be pushed back," said Madden. "Traders are cautiously optimistic, hence why stocks are higher this morning."
Hopes of the US easing its stance towards Europe comes as investors await a speech from Trump at around 1700 GMT, in which they will look out for any signs of progress in signing a trade deal with China.
Ahead of this, Wall Street is called for a higher open. The Dow Jones and S&P are seen up 0.1%, while the Nasdaq is pointed 0.2% higher.
In data on Tuesday, the UK unemployment rate improved in September, but earnings growth slowed.
The unemployment rate was estimated at 3.8% for the July to September period, down from 3.9% last quarter and 0.2 percentage points lower than a year earlier. FXStreet consensus had seen the rate remaining steady at 3.9%.
Earnings growth, however, disappointed.
For total pay, including bonuses, growth was 3.6% year-on-year. The rate was also the same for regular pay, or when excluding bonuses. FXStreet had seen the pace of growth for both at 3.8%.
For the June to August period, total earnings growth was revised down to 3.7% and regular wages grew 3.8%.
"The jobs data this morning, much like the GDP data on Monday, was brushed aside by traders more focused on the outcome of the election and what it means for Brexit," said Craig Erlam at Oanda.
"It's unlikely this week's data would have any impact on the election outcome although a recession and rising unemployment would not have helped the Conservatives and would have been an unwelcome distraction," he added.
In the latest twists and turns of the UK election saga, Nigel Farage has called on the Tories to stand aside for his Brexit Party in seats they have no prospect of taking from Labour.
In a major climbdown, Farage announced on Monday that his party would not run in the 317 constituencies the Conservatives won at the 2017 general election. He is now urging the Tories to reciprocate by giving the Brexit Party a clear run in Labour-held seats where they can "never win".
His appeal came as senior Tories urged him to go even further and withdraw from key Labour marginals which Prime Minister Boris Johnson needs to take if he is to secure a Commons majority in the election on December 12.
The pound was quoted at USD1.2828 at midday, down from USD1.2867 late Monday.
In London, the FTSE 100 was receiving some support from Vodafone and AVEVA, both stocks gaining following their interim earnings reports.
Vodafone was up 2.3% after raising its annual guidance and narrowing its interim loss.
In the six months to September 30, revenue edged 0.4% higher year-on-year to EUR21.94 billion from EUR21.85 billion. The FTSE 100 firm registered a pretax loss of EUR511 million, slimmed from EUR2.85 billion last year.
First half adjusted earnings before interest, depreciation and amortisation rose 2.7% year-on-year to EUR7.11 billion from EUR6.92 billion. Vodafone now expects full-year adjusted Ebitda in a range of EUR14.8 billion to EUR15.0 billion, up from previous guidance of between EUR13.8 billion and EUR14.2 billion.
AVEVA advanced 2.2% as the information technology company swung to a half-year profit.
The firm reported a pretax profit of GBP24.0 million for the six months to the end of September compared with GBP5.5 million loss a year ago, as revenue rose by 17% to GBP391.9 million from GBP336.5 million. Organic constant currency revenue grew by 12%.
AVEVA explained that it benefited from business integration and actions taken to optimise performance. At the same time, AVEVA's investment in sales & marketing was increased, it said, to help underpin future growth.
At the bottom of the index was DCC, down 3.3%. The Dublin-headquartered company said profit in the first half of its current financial year was hurt by exceptional costs, but it still expects to deliver annual results in line with market forecasts.
The sales, marketing and support services provider reported pretax profit of GBP57.6 million for the year to September 30, down by a third compared to GBP85.9 million it delivered a year ago, as revenue slid by 1.4% to GBP7.31 billion from GBP7.42 billion. On a constant currency basis, revenue fell by 1.7%.
Separately, DCC has bought Ion Laboratories, a provider of contract manufacturing services which is currently commissioning a new nutritional gummies manufacturing line, for USD60 million.
In the FTSE 250, Electrocomponents weighed as the stock slumped 11%.
For the six months ended September, pretax profit narrowed 4.3% to GBP89.0 million from GBP93.0 million the year prior. This was despite revenue rising 7.3% to GBP978.7 million from GBP911.8 million the year before. Profit performance was hurt by rising costs during the period on the year prior.
In the first six weeks of the second half of the financial year, Electrocomponents said it "continued to outperform" with modest growth despite weakness in some of its key markets.
B&M European Value Retail shares shed 5.6% after the firm reported a sharp slide in profit on the impairment of its German business.
For the six months ended September 28, pretax profit fell by two-thirds to GBP32.2 million from GBP109.1 million the year prior. This was despite revenue rising 21% to GBP1.90 billion from GBP1.57 billion the year before.
Profit performance at the FTSE 250-listed firm was hurt by rising administrative costs and a GBP59.5 million impairment related to its Jawoll business in Germany. On its German operations, the company said it is undertaking a strategic review to determine the future of the business after a "continued disappointing financial performance".
Russ Mould at AJ Bell said it looks like B&M has "made a mess" of the German business.
"This looks like a business which has taken its eye off the ball and today's sharp share price decline is investors' way of expressing dismay with the performance," he said.
Trainline slid 4.9% after a shareholder sold its entire stake in the firm.
Late Monday, JP Morgan said private equity firm KKR Victoria Aggregator LP, alongside some other shareholders, would be selling 68.0 million shares in the company, worth 13.9% combined.
It confirmed early Tuesday all of the shares have been sold at 410 pence each, netting the sellers GBP279 million. Trainline, which hosts an online transport ticket platform, will not get any funds from the sale, as it was of existing shares.
This follows a similar move in September, when the parties sold a combined 65.5 million shares in Trainline at 435p each, netting GBP285 million, so this week's sale was at a lower price. Trainline listed in London back in June at 350 pence per share.
By Lucy Heming; lucyheming@alliancenews.com
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